Time and Operations Costs Week 8 CeCe

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Grand Canyon University *

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BHS-430-05

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Finance

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Jan 9, 2024

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docx

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Ceita Neal Grand Canyon University ENT-436 Professor Klatka November 6, 2022 Time and Operations Costs In order to support my financial estimates for my seed company concept, I have produced a pro forma excel sheet. Although I am aware that I generated no actual money, I did this in an effort to demonstrate how doing so would harm my company by paying more individuals than I had planned to. Instead, I want to launch my company in high school's first biotechnology course and engage students in a project that will help them develop and benefit their communities. To ensure that I place an emphasis on quality rather than quantity, I will start with a small batch of three seeds and then gradually increase that number. By the end of the 12th fiscal quarter, one of our goals is to have increased the number of seed kinds that we provide to clients to around 36, with the aim of introducing three new seed varieties every three months. The cost of operation will comprise all of the materials that are necessary for operation, such as seed, plots, water, soil, biotech tools, and manufacturing. The highest yearly running cost that I have calculated is $500. This is due to the fact that I want to initiate this effort in schools as a project with the goal of providing gardens in communities. As soon as we get started, this may change and become less expensive. As a consequence of growing our own seed for resale, our expenses will average $615 for the first three quarters of our business, $670 for the subsequent three quarters, and $730 for the last six quarters of our business as a direct result of expanding 1

our sales volume. These aspects may be subject to change depending on the amount of unpaid interns and student volunteers that we are able to get to help us in this endeavor. My FTEs for the first three quarters will mostly consist of three-hour work hours spent traveling to and checking the quality of seed purchases; during this time, a consultant will be on hand to provide advice and ensure that we are making progress toward our objective. Due to the anticipated increase in the variety of seeds we plant, the consultant's involvement will grow from 2 to 6 hours per week throughout quarters four through six. The last seven to eight hours will be used for completing tasks such as shipping, developing new seeds, and other similar activities during quarters seven through twelve. 4 Because to work schedules, this won't go above 8 hours. The consultant will be with us for 1.5 hours total, and by the end of the eighth quarter, we'll have learned all we need to know to proceed without them. My pro forma estimates that after one year in business we will have made $7,350 in sales over all four quarters, $21,310 in revenue after two years, and $40,290 in revenue after three years. This may not seem like much, but it does not account for how much we will really sell. A more in-depth examination of the graph in my pro forma indicates that after taking into account salary and several other operating expenditures, it seems that my firm will not generate a profit. In addition, I need around $1.8 million in the first three years, with the first year needing a sum that is more than $300,000. 5 Despite the fact that my pro forma implies that the real costs or cumulative cash requirements will be much less than or equal to $100,000, I can guarantee that these numbers will be far lower. It would seem that the gross profit of my firm would be negatively impacted by the fact that I will have more costs than I have earn. The amount of money I will need to finance this project is forty-five times as much as the total income I made in the first quarter. That is how 2

much money I will need to spend overall, taking into account things like labor, rent, land, crops, and high-tech equipment. If I were to implement this in a school context, there are undoubtedly a variety of concerns that I would need to take into consideration. The only individuals that I will need to pay are the gardening and biotech students who will be performing the most of the job. The instructors who are linked with my company also function as consultants since they educate the students what they will be working on, so I won't have to pay them. My objective was to make advantage of the school's horticulture area as well as the biotech instruments. while the cost of purchasing or renting land, a building, or brand new equipment would be far more for me. 3

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References. Stuebs, Martin, et al. "Brittney’s Boutique: Tailoring financial statements for function as well as fashion." Journal of Accounting Education 58 (2022): 100768. Lynn, S. (2020). Inputs to Business Valuation. In Valuation for Accountants (pp. 177-203). Springer, Singapore. Rahman, Nadia. "The overview of Avery Dennison Bangladesh." (2022). 4